Erdogan follows slim referendum win with warnings to opponents

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An emboldened Recep Tayyip Erdogan followed his win in a referendum that ratified the supremacy of his rule by taking aim at political opponents at home and abroad.

At his victory speech late on Sunday, supporters chanted that he should bring back the death penalty — a move that would finish off Turkey’s bid to join the European Union — and Erdogan warned opponents not to bother challenging the legitimacy of his win. He told them to prepare for the biggest overhaul of Turkey’s system of governance ever, one that will result in him having even fewer checks on his already considerable power.

The success of a package of 18 changes to the constitution was narrow, with 51.4 percent of Turks approving it. It came at the end of a divisive two-month campaign during which Erdogan accused opponents of the vote of supporting “terrorists” and denounced as Nazi-like the decision of some EU countries to bar his ministers from lobbying the diaspora.

“The referendum campaign was dominated by strongly anti-Western rhetoric and repeated promises to bring back the death penalty,” said Inan Demir, an economist at Nomura Holdings Inc. in London. “One hopes that this rhetoric will be tempered now that the vote is over,” but recent steps by the Turkish government do “not bode well for the hoped-for moderation in international relations.”

The lira strengthened 2 percent to 3.6354 per dollar by 2:30 a.m. in Istanbul as investors thought the victory would usher in a period of greater predictability and could lure back a bit of the foreign investment that’s fled the country in recent years. The currency is still down by a fifth in the past year.

“It looks like the best outcome for financial markets because it gives the mandate, but not a strong mandate,” said Ozgur Altug, the chief economist at BGC Partners in Istanbul, who predicts stocks in Istanbul will rally about 7 percent.

While markets looked favorably on the result as a sign political turmoil in the majority Muslim nation of 80 million people may settle down and help jumpstart the economy, Turkey’s biggest political party alleged fraud, demanding a recount. The EU’s rapporteur on Turkey, Kati Piri, said given the “unfair election environment,” EU accession talks will be suspended if the constitution is passed in its current form.

“You saw how the West attacked. But despite this, the nation stood tall, didn’t get divided,” Erdogan told his supporters, while calling on Turks who opposed him to “stop tiring themselves out” and accept the course the country is headed on.

“Likewise, we want other countries and institutions to respect the decision of our people. We expect those states that we call allies in particular to develop their relations with our country in line with our sensitivities, especially on the fight against terror,” he said at a palace in Istanbul. A majority of voters there and in Turkey’s other big cities voted against the switch from a parliament-led system of government to an executive presidency.

The result is a remarkable turnaround for a president who just nine months ago faced down an attempted military coup. The uprising was quickly crushed and, armed with a popular mandate to consolidate his rule, Erodgan now has room to crack down further on his opponents. In the nine months since imposing a state of emergency, he’s already fired more than 100,000 people and jailed 40,000, among them academics, journalists and judges.

Prime Minister Binali Yildirim called the win the ”the best answer” to foes including the Kurdistan Workers Party (PKK), which is waging an insurgency in southeast Turkey, and sympathizers of Fethullah Gulen, an influential U.S.-based Islamic preacher Erdogan blames for orchestrating the coup attempt. The struggle against “internal and external enemies will intensify,” Yildirim said.

The referendum highlighted the divisions in Turkey. Voters in the small towns that dot the Anatolian heartland approved it overwhelmingly, although the major cities that power Turkey’s economy, including the capital Ankara and the coastal city and secular stronghold of Izmir, opposed it. Istanbul, where the ruling Justice and Development (AK) party Erdogan founded has never lost a general election, rejected it by 51.4 percent.

The constitutional changes mean Erdogan could potentially hold the reins until 2029, a decade longer than the rule of Ataturk, the father of the modern secular nation whose legacy he’s sought to roll back. He will have authority to appoint ministers and top judges at his discretion and call elections at any time. It will also give him much greater sway over fiscal policy and may deepen investors’ concerns about the independence of the central bank.

The changes, many of which won’t take effect until after the next election in 2019:

Abolish the post of prime minister.

Remove the requirement for presidential neutrality, which allows Erdogan to reinstate his affiliation with the ruling AK party.

Enable the president to stand in two five-year election cycles, and a third with parliamentary backing.

Allow the president to appoint six of a whittled-down panel of 13 top judges, with others chosen by lawmakers.

Opposition politicians worry the new system will threaten the separation of powers on which liberal democracies traditionally rely — something the Council of Europe’s legal watchdog flagged last month when it warned there aren’t enough checks and balances to safeguard against Turkey becoming an authoritarian regime.

By channeling nationalist sentiment and slamming segments of Turkey’s older political elite, Erdogan tapped into the same forces that powered Donald Trump to the White House, pushed Britain out of the EU and put Marine Le Pen within shouting distance of the French presidency.

In his expanded role, Erdogan will become one of the G-20’s most powerful elected leaders. His win is also part of a trend toward a more authoritarian style of politics mirroring Vladimir Putin’s Russia, where more and more power is accumulated around one person.

Erdogan’s triumph “represents a blow to the assumption that liberal or even in some cases hybrid democracies are structured to prevent authoritarian figures from hijacking the political system,” Anthony Skinner, a director with U.K.-based forecasting company Verisk Maplecroft, said before the results were declared.

Beyond Turkey’s Black Sea shores, Erdogan’s next task will be to reassess political alliances. While Erdogan’s EU attacks during the campaign appealed to nationalists at home, they may have inflicted damage that won’t be easy to repair. The bloc, which Turkey has been trying to join since the 1960s, accounts for almost half of Turkey’s exports.

Several Turkish officials said they’d press the EU harder for things such as visa-free travel to citizens in exchange for upholding a critical deal on halting the flow of migrants to Europe. Ankara’s ties with Washington have also deteriorated as the U.S. backed Kurds in Syria that Turkey considers terrorists. Turkey, a NATO member, has been trying to persuade the Trump administration that if it’s serious about taking on Islamic State, it needs the nation’s support.

Erdogan will probably try to start a “charm offensive” toward the EU and U.S. to validate the legitimacy of the new political system, said Ozgur Unluhisarcikli, the office director in Ankara for the German Marshall Fund of the United States, a global think tank. “If reciprocated he may reverse some of the democratic backsliding we have seen recently. However, if the charm offensive is not reciprocated, we could see decisions such as reinstating of death penalty.”